What can we learn from the data around hybrid working?
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Employees championing the cause of remote work have made the unforgiving promising of higher revenue growth by presenting a compelling case, contending that remote work is intricately tied to heightened productivity. They assert that it not only contributes to environmental well-being by reducing commutes but also enhances diversity by expanding the talent pool.
This week, Scoop, the hybrid work management startup, released a report in collaboration with the Boston Consulting Group. The report, backed by data from the Flex Index, dissected remote work policies and their impact on revenue growth across 554 public companies. Companies affording employees the autonomy to decide their office fate have not only weathered the storm but surged ahead, boasting a remarkable 16-percentage-point lead in revenue growth over their more rigid counterparts.
Rob Sadow, the CEO and co-founder of Scoop, expressed his surprise at the significant gap, saying, "That gap was really surprising to us—and larger than expected." Scoop's Flex Index, an online repository of remote work policies for over 7,500 companies, served as the backbone for this groundbreaking analysis.
Nicholas Bloom, an esteemed economist and Stanford University professor advising Scoop, looked into the scarcity of studies examining the link between revenue growth and remote work policies. He emphasized that most surveys focus on individual experiences rather than corporate policies. However, combining Scoop's findings with previous research linking flexible policies to headcount growth, Bloom stated, "Collectively, they paint a pretty strong picture."
The burning question remains: Does the data suggest that remote policies directly cause revenue growth, or is it a symptom of a larger, more innovative culture? Debbie Lovich, a senior partner at Boston Consulting Group, offers a nuanced perspective, stating that flexible policies are likely a "symptom" of a culture that values trust, innovation, and employee-friendly benefits.
The Flex Index report doesn't definitively claim that flexible policies are the magic potion for revenue growth. Lovich proposes a compelling argument, suggesting that companies with flexible policies are inherently more pro-innovation, purposeful, and engaging, elements that naturally contribute to higher revenues. "I doubt those companies would be taking attendance and measuring badge swipes," hinting at the trust-driven nature of their workplace culture.
Delving into the nitty-gritty details, Scoop's Flex Index categorizes companies based on their remote work policies. Companies offering "fully flexible" policies, granting employees the freedom to choose when or whether to come to the office, flaunt an impressive 21% industry-adjusted revenue growth rate over the past three years. Contrastingly, those shackled by more restrictive policies, including corporate mandates for in-office days or full-time in-office requirements, limped behind with a mere 5% growth rate. A glance into the numbers reveals that 27% of these companies boast "fully flexible" policies, 55% follow a hybrid model with varying in-office requirements, and the remaining 17% are firmly rooted in the traditional full-time in-office approach.
Lovich emphasizes the importance of tailoring office time to individual employees, stating, "The more we can empower people closest to the work, the better the work will be." She highlights the significance of this tailored approach in the realm of hybrid policies, resonating with the growing call for employee autonomy.
Sadow, undeterred by any potential lack of causation in the data, sees the results as a powerful counterargument. "The argument a lot of execs and board members have is they believe companies that offer flexibility are going to underperform because they're not together," he observes. "The data suggests not only is that not true in terms of underperformance, but you might actually outperform."
The debate over the future of work is far from over. The data has challenged conventional notions and proving that flexibility isn't just a nicety—it's a strategic advantage.